N.J. cheats the arts with hotel tax shell game: Editorial

This is the kind of shell game that withers public confidence in government.

The State Theatre in New Brunswick is one of hundreds of arts organizations funded by the hotel-motel occupancy tax.Patti Sapone/The Star-Ledger

Art and cultural organizations around the country are slowly recovering from the recession that sent public donations and corporate support plummeting. That’s why it’s infuriating to learn that revenue from a hotel/motel tax in New Jersey — created in 2003 specifically to secure the financial stability for the state’s arts and cultural institutions — has been largely diverted to the general budget.

The tax was sold to the public on a simple premise: Instead of funding arts and culture with an annual appropriation from the Legislature, use a dedicated a portion of the hotel/motel tax. If tax revenues grow, the sector would get a bigger bite; if revenues dropped, it would get less.

That’s not quite how it worked out.

As The Star-Ledger’s Peggy McGlone reported, the tax generated more than $1.1 billion for state and local governments since it was introduced 10 years ago, but only $184 million has gone to the New Jersey State Council on the Arts, the largest of the four agencies that should have received a far bigger chunk of the money. The arts council budget is critical because it funds numerous theatre companies, orchestras, museums and dance troupes across the state; many leverage that support to obtain matching funds from corporate donors and private foundations.

The law that established the tax contained a poison pill: If the state allocation from the tax fell below the 2004 funding level of $28.2 million — under $16 million for the arts council — the tax would no longer be collected. That was supposed to be a floor for the funding, but instead the state has used it as the ceiling and kept the surplus. It’s the kind of shell game that withers public confidence in government.

And so it should come as no surpise that our museums and historical societies are in distress, cutting hours and staff. But keeping the arts community alive on a thin gruel is nowhere near the stability that was promised.

It’s a cautionary tale for supporters of a separate bill that would take a slice of the sales tax to fund the state’s open space and historic preservation programs, which have run out of money. It might look great on paper, but without the political will behind it, the promises are hollow.